Case Note & Summary
The dispute arose out of a contract between the appellant, Parasramka Commercial Company, and the respondent, Union of India. The contract contained an arbitration clause, and the disputes were referred to arbitration. The arbitrator made and signed the award on April 26, 1950. Instead of sending a separate notice, the arbitrator sent a copy of the signed award to the appellant, which was acknowledged by letters dated May 5 and May 16, 1950. On March 30, 1951, the appellant filed an application in the Subordinate Judge’s Court for a decree in terms of the award. The Subordinate Judge dismissed the application as time-barred, holding that the application was filed beyond the period prescribed under Article 178 of the Indian Limitation Act, 1908. The appellant then filed Civil Revision No. 330-D of 1954 before the Punjab High Court, Circuit Bench at Delhi, which also dismissed the revision on August 8, 1963. Aggrieved, the appellant approached the Supreme Court by special leave. The central legal issue was whether sending a copy of the signed award satisfied the requirement of “notice in writing” under Section 14(1) of the Arbitration Act, 1940, and thereby triggered the limitation period. The appellant contended that a separate formal notice was mandated by the provision, while the respondent argued that the copy of the award itself served as adequate notice. The Supreme Court, speaking through Hidayatullah, C.J., interpreted Section 14(1) to mean that the notice need not be in the form of a separate letter. It is sufficient if the writing intimates clearly that the award has been made and signed. The Court further observed that the non-mention of the amount of fees and charges payable in respect of the arbitration and award does not affect the validity of the notice for the purpose of limitation. Applying this principle, the Court found that the appellant had sufficient notice of the making and signing of the award when it received the signed copy in early May 1950. Consequently, the application filed on March 30, 1951, was well beyond the 90‑day limitation period. The appeal was dismissed, and the decision of the High Court was affirmed.
Headnote
A) Arbitration - Notice of Award - Section 14(1) Arbitration Act, 1940; Article 178 Indian Limitation Act, 1908 - The requirement of notice in writing of the making and signing of an award does not require a separate formal letter; a copy of the signed award sent to parties constitutes sufficient notice if it clearly intimates that the award has been made and signed. Non-mention of fees and charges does not vitiate the notice for limitation purposes. The period of limitation for filing an application for a decree in terms of the award begins from the date of service of such notice. (Paras 138-139)
Issue of Consideration
Whether a copy of the signed award sent to the parties constitutes a valid notice under Section 14(1) of the Arbitration Act, 1940, and whether the application for a decree in terms of the award was time-barred under Article 178 of the Indian Limitation Act, 1908.
Final Decision
The Supreme Court held that the notice under Section 14(1) of the Arbitration Act, 1940 need not be a separate letter; it is sufficient if it is in writing and intimates clearly that the award has been made and signed. The non-mention of fees and charges does not affect the notice for limitation purposes. Since the appellant had received a signed copy of the award, it had sufficient notice, and the application for a decree in terms of the award was out of time. The appeal was dismissed.
Law Points
- notice under section 14(1) of the Arbitration Act
- 1940 need not be a separate letter
- copy of signed award constitutes sufficient notice
- notice in writing must clearly intimate that award has been made and signed
- non-mention of fees and charges does not affect limitation
- limitation period for application under Article 178 of the Indian Limitation Act
- 1908 begins from date of service of such notice
